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Updated: The NY Times reports this morning that, "consortium of prominent investment funds has amassed a 21 percent stake in CNet and is seeking to oust the company’s directors and take over a majority of its board".

The proxy fight is expected to shake up CNet, whose shares have underperformed the market and its competitors, leaving investors with a 19 percent loss over the last three years while other Internet-related companies grew.

According to the article CNET has rejected the offer because it does not pay a premium above its current stock price.

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In a common Matt Drudge move an unlinked headline appeared just after midnight on the Drudge Report suggesting investors are plotting management changes at CNET.

The text reads:

"INVESTORS MAY BE SEEKING A TAKEOVER OF CNET... DEVELOPING..."

It is likely that Drudge was tipped by a news story in progress that will appear later tonight on the web and in papers early tomorrow. Time will tell.

CNET has been the subject of rumors and speculation for months and a recent analysts stock downgrade did not help.